Dubai is diverting into many fields and one of them is offshore banking. This is a tax haven for investors. The following article discusses offshore banking in detail and explains how it acts as a tax haven for the people.
Dubai is located on the edge of Muslim world led by Saudi Arabia. It is a Muslim country but the laws are not entirely based on the Shariat. Islamic banking that discourages Interest or Act is given the go by. Thus, Dubai is a fairly modern state that follows the latest banking ethos as is the vogue all over the world.
With the dwindling of oil reserves, Dubai has perforce to look for other avenues as far as revenues are concerned. Thus, Dubai has encouraged offshore banks to operate without interference from Islamic banking laws. We are aware that an offshore bank is a bank that is located outside the country of the depositor.
Most of the offshore banks are located in what are known as tax havens. Dubai comes in the same category and offshore banks are encouraged here .These provide a low tax base and also give the depositor certain financial and other advantages. For without these advantages, a depositor may not venture to open an offshore banking account.
Dubai follows the principles of privacy of banking accounts as practiced by the Swiss banks. They does follow in spirit the 1934 Swiss banking act which guarantees the secrecy of accounts and deposits. They also provide a no tax environment and thus the account holder having an account in a Dubai offshore bank is free of the obligation of paying any type of tax.
Dubai offshore accounts also ensure that the amounts deposited can be easily withdrawn as per the laid down regulations. In addition, these accounts in Dubai are insulated against political instability as the Dubai Maktoum family has ruled Dubai for over 150 years.
When an individual or company opens an offshore banking account in Dubai he may do it for a variety of reasons which are not asked for by the banks operating the offshore accounts.
Dubai has now become one of the world’s leading financial markets and major world banks have all come to Dubai to open off shore accounts like HSBC offshore, abbey national and ABN Amro bank. Licenses to operate offshore bank accounts are easily obtained. However, all banking activities related to any form of banking is regulated by the apex bank in the Dubai. This is the UAE Central Bank. This bank lays down all financial and other norms to operate offshore accounts.
The central bank lays down many rules and follows them strictly. However, banks operating in the DIFC free trade zone are free of most restrictions. Thus, big names in the banking sector are attracted to Dubai and have made their presence there. Dubai is similar to other tax havens and offers no corporate taxes, income taxes, taxes on capital gains, property and wealth tax. In addition, it offers easy accessibility to the money deposited. Dubai offshore banking also offers additional benefit in the form of other financing options for you. These options make the offshore banking in Dubai even more attractive.